My account size is 80L and I exclusively trade nifty50 index options. At Monday EOD, I had 5L margins available in the account. On Tuesday bod, it got revised to -8L. Must have been the effect of the election result day uncertainty, I thought. Some of my positions were squared off by the zerodha team at those insane prices (my fault I guess, since I could not add sufficient margin in time). Paid 2x brokerage and C&T charges for 5 orders (which in my opinion should have been done in a single order, but that’s not the topic of discussion in this thread).
Cut to wed EOD - I had +2L margins. And by today bod, it has been updated to -11L. Can’t understand what changed between yesterday and today. There doesn’t seem to be any scientific method to this calculation and all the fluctuations.
And I know @nithin won’t be interested to take it up with the exchanges. Given the earnings generated by auto-square offs these fluctuations enable (which the team likes to do lot by lot, and a lot is 25qty for nifty now yay!!), he’s all set to beat Adanis and Ambanis to the top of the Richest Indians list.
I wish we could go back to the upfront margin penalty era!
@asen you are absolutely right , as a fellow option seller I 100% agree with you .
but our voices are very less here , no one cares . Even according to the rules of SEBI , DP should mention the shortfall the day before or at the end of the day .
But zerodha mentions only next day that at 8 AM sometimes 9 am , most of the times even after 9 AM it changes and worse every time it goes into negative for no reason simply . I wonder do they even know how it is calculated ?
Changes in margins are depend on multiple factors, like changes in SPAN and NOV (Net Option Value), SPAN changes are depend on volatility, events, etc. (read more) and margins are always calculated at overall portfolio level. The margin required to hold short options increases as the options move in the money. MTM loss margins are to be collected in case of intraday losses. Please create a ticket to receive more account-specific clarification on this.
Thanks for sharing, this link kind of suggests how deep otm short positions might lead to inefficient SPAN values. Will raise a ticket to understand better the calculations using an example of my positions this week.
Intuitively, it didn’t make sense to significantly raise span on Tue, drastically reduce it on Wed and then again raise it on Thur - given all three variables: volatility, underlying price & time to expiry were moving in a favorable direction (from wed to thur). But I’m sure the explanation will be in the equations🥴
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